A critical component of the success for any organization is the ability to keep the cost of doing business and growing business at a minimum. Sourcing and recruiting of employees represent a very substantial cost with poor results through turnover and lack of excellent performers and can lead to erosion of the bottom line. The costs associated with identifying and hiring a replacement for a vacant position include advertising, an employment agency, employee referral award, Internet posting and other forms of announcing the availability of the position. At the next stage, interviews conducted by management and/or hiring department staff will cost money in terms of the time that they spend arranging for interviews, conducting the interviews, calling references, having discussions about the people they met, and notifying candidates who did not get the job.
For growing organizations, hiring people who are efficient, reliable, and excellent performers for new positions can also reduce the cost of doing business. Such employees can help reduce cost by allowing an organization to operate with a smaller workforce and reduced downtime. Therefore, hiring the right people is a necessity for any organization in order to reduce the cost of doing business.